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ITR
ITR
Intertrading - Unaudited interim results for the period ended 31 august
2006
INTERTRADING LIMITED
Registration number 1987/004777/06
("Intertrading" or "the company")
Share code: ITR
ISIN code: ZAE000015566
UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 31 AUGUST 2006
Intertrading specialises in the procurement and marketing of fresh fruit,
vegetables and macadamia nuts from southern African producers.
The group markets these products internationally via sea and airfreight and
also provides services to agriculture including technical advice, freight
forwarding and logistical services.
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Year
half year half year ended
31 August 31 August 28 February
2006 2005 2006
R"000 R"000 R"000
Revenue 137 503 154 849 298 101
Cost of sales (122 505) (138 260) (261 994)
Gross profit 14 998 16 589 36 107
Selling and marketing cost (3 213) (3 543) (7 510)
Administrative expenses (8 493) (5 134) (7 093)
Operating expense (6 931) (6 527) (16 785)
Procurement cost (2 161) (2 046) (4 461)
Other income/(expenses) 4 215 944 (7 622)
Operating (loss)/profit
before interest (1 585) 283 (7 364)
Interest paid (1 169) (2 053) (1 436)
Interest received 274 1 448 486
Net loss before taxation (2 480) (322) (8 314)
Taxation 627 (407) 1 395
Net loss attributable to
shareholders (1 853) (729) (6 919)
STATEMENT OF CHANGES IN EQUITY
Equity at beginning of period 64 132 71 551 71 551
Net loss for the period (1 853) (729) (6 919)
Dividend declared in respect
of prior year - (500) (500)
Equity at end of period 62 279 70 322 64 132
CASH FLOW STATEMENT
Cash receipts from customers 122 859 101 856 281 263
Cash paid to suppliers and
employees (130 835) (127 304) (286 544)
Cash utilised by operations (7 976) (25 448) (5 281)
Interest received 274 1 448 486
Interest paid (1 169) (2 053) (1 436)
Taxation paid (1 307) (829) (1 614)
Dividend paid - (500) (500)
Cash utilised by
operating activities (10 178) (27 382) (8 345)
Cash outflow from
investing activities (2 120) (3 098) (6 547)
Cash inflow from
financing activities 557 1 476 1 484
Net movement in cash (11 741) (29 004) (13 408)
Net cash resources at
beginning of the year (8 340) 5 068 5 068
Net cash resources at end
of the period (20 081) (23 936) (8 340)
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Year
half year half year ended
31 August 31 August 28 February
2006 2005 2006
R"000 R"000 R"000
ASSETS
Non-current assets
- Property, plant, equipment
and software 15 097 13 984 14 846
- Goodwill and trademark 31 597 32 243 31 812
- Deferred taxation 3 478 1 501 3 293
- Loan to related party 2 681 - 2 164
- Available-for-sale
financial assets 66 60 66
Current assets 67 319 117 504 58 686
120 238 165 292 110 867
EQUITY AND LIABILITIES
Share capital and premium 47 452 47 452 47 452
Other reserves - fair
value gains 9 - 9
Distributable reserves 14 818 22 870 16 671
Shareholders" interest 62 279 70 322 64 132
Long-term liabilities 2 036 2 505 1 478
Deferred taxation 760 1 458 552
Current liabilities 55 163 91 007 44 705
120 238 165 292 110 867
Discontinued grain trading
operations
Total assets 2 300 2 857 2 459
Total liabilities 3 995 3 499 3 882
SEGMENTAL ANALYSIS
Segmental revenue
Seafreight 84 488 113 492 189 168
Airfreight 62 299 50 660 133 012
Other 3 666 2 399 4 307
Less internal revenue (12 950) (11 702) (28 386)
137 503 154 849 298 101
Segmental results
Seafreight (3 173) (932) (3 627)
Airfreight (2 940) (83) 1 563
Other* 4 528 1 298 (5 300)
Operating (loss)/profit
before interest and taxation (1 585) 283 (7 364)
*Mainly foreign exchange operations
Supplementary Information
Number of ordinary
shares ("000) 50 000 50 000 50 000
Weighted average number
of shares in issue ("000) 50 000 50 000 50 000
Headline losses per share
(cents) and loss per share
(cents) (3,7) (1,5) (13,8)
Net asset value per share
excluding goodwill (cents) 62,70 78,50 66,40
OPERATIONAL REVIEW
The first half of the year was characterised by the high value of the Rand
and lower export volumes for citrus and other products. As such,
Intertrading has not been able to export sufficient volumes to cover its
cost base and the group has shown a loss for the first half. In the light
of the parlous financial state of many farmer producers it was deemed
prudent to provide a significant sum for potential problems that may arise
with suppliers. The provision accounts for some 36% of the operating loss
before interest and tax.
SEAFREIGHT SECTOR
It is pleasing to note that Intertrading increased its market share in the
2006 season in spite of a decline in South African fruit exports to
significantly low levels. Nevertheless while overseas prices were
reasonable, overall volumes exported by this division were significantly
lower than in the previous year.
The deciduous fruit export division based in the Cape, incurred a loss for
the half year as the season and in particular grapes, has not yet got
underway.
World macadamia nut supply has increased sharply in the last year. As a
consequence export prices for certain styles have declined markedly. In the
light of this, it is pleasing that the macadamia nuts business has returned
to profitability in the first half.
AIRFREIGHT SECTOR
Sky Services has once again been adversely affected by the ban on ostrich
meat
Exports, and in addition, fish volumes exported from South Africa have been
at record low levels. As a consequence this operation recorded a loss in
the period under review. Sky Services has recently expanded its facilities
in Cape Town to cope with the anticipated increased volumes of
horticultural produce.
Agrilink, the division that exports fresh produce by air, also had a
difficult start to the year and has recorded a small loss in the six
months.
The peak season for both these operations is about to start and the board
is optimistic that they will perform satisfactorily in this period.
DIRECTORATE
Kevin Kay resigned as director in March and his place was filled by Nino
Burelli. Subsequent to this appointment, the board of directors has been
streamlined and now consists of three executive and four non-executive
directors. Richard Wells, Cornel van der Merwe and Warwick Marshall have
resigned as non-executive directors and Fritz Pohl and Bert de Kovel have
resigned as executive directors. The board acknowledges and thanks all the
retiring directors for their contribution.
PROSPECTS
The group is expecting an improved performance in the second half of the
year
provided expected volumes of exports materialise and the Rand does not
strengthen markedly. The board however is acutely aware of the poor
performance of Intertrading and recognises the need to rationalise certain
aspects of the group that have consistently underperformed. A restructuring
process is currently underway with a number of options being investigated
and once approved will be implemented. The exercise will undoubtedly incur
"once off" restructuring costs. Coincidental with the restructuring, the
group will be actively seeking opportunities to increase the business
footprint of the group in fields complementary to its present businesses
aimed at delivering sustained earnings and cash growth.
BASIS OF PREPARATION
The interim financial report is prepared in accordance with International
Financial Reporting Standards ("IFRS"). The accounting policies applied in
the preparation of the results for the six months ended 31 August 2006 are
consistent with those adopted in the financial statements for the year
ended 28 February 2006, except for the adoption of accounting standards
interpretations issued with effect from 1 January 2006. The adoption of the
interpretations has had no material reportable impact on the financial
results, position or cash flows of the consolidated group.
By order of the board
C Jousse G F M van Rooyen
(Acting Chairman) (Managing Director)
Woodmead 13 November 2006
Registered office Transfer secretaries
Block 3 Computershare Investor
Harrowdene Office Park Services 2004
Western Service Road (Pty) Limited
Woodmead, 2148 70 Marshall Street
(PO Box 100 Johannesburg, 2001
Woodlands, 2080) (PO Box 61051
Marshalltown, 2107)
Directors
Non-executive: C Jousse (Acting Chairman), J Azoulay, H Weirich, G G
Burelli
Executive: G F M van Rooyen (Managing Director), C J Hull (Group Financial
Director), B Julicher
www.intertrading.co.za
Date: 23/11/2006 01:37:07 PM Produced by the JSE SENS Department
